You may already know that the S&P 500 index is a market capitalization weighted index. That means the largest capitalization companies, make up the largest percentage of the index. It also means that "booming" sectors can become overweighted in the S&P 500 as well. In 1999-2000 for example both Telecom and Internet sectors became heavily overweighted in the index. Both have since fallen back to more reasonable levels, but that caused severe downward pressure on the S&P during the correction.
The Rydex RSP fund is different, it purchases an equal weighting of each of the stocks in the S&P 500. So .2% of the assets are invested in each of the S&P 500 stocks. At the end of each quarter, the fund is rebalanced to bring the equal weights back to .2% for each stock. This means the fund naturally buys under performing sectors and sells sectors that have outperformed the index at the end of each quarter. This in itself is a type of mechanical approach to "profit taking / bargain hunting". Also, by having .2% in each stock there is a greater emphasis on smaller stocks than there is in the traditional S&P 500 index.
These factors have lead to a steady RSP outperformance since it's inception when compared to the S&P 500 index. For more information please consult the fact sheet below and always remember to read the prospectus before making any investment decisions!
Rydex RSP Fund Fact Sheet
Rydex RSP Fund Prospectus
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